UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2006
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission file number: 0-28353
INTEGRAL TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in it charter)
NEVADA 98-0163519
- ------------------------------------- -------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
805 W. ORCHARD DRIVE, SUITE 7, BELLINGHAM, WASHINGTON 98225
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(Address of principal executive offices)
(360) 752-1982
---------------------------
(issuer's telephone number)
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(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the issuer is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: AS OF NOVEMBER 6, 2006, THE ISSUER
----------------------------------
HAD 45,439,969 SHARES OF $.001 PAR VALUE COMMON STOCK OUTSTANDING.
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Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [X]
INDEX
PAGE
----
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
INTEGRAL TECHNOLOGIES, INC.
(A Development Stage Company)
Consolidated Financial Statements
September 30, 2006
(U.S. Dollars)
(Unaudited)
Consolidated Balance Sheets. . . . . . . . . . . . . . . . . . . F-1
Consolidated Statement of Operations . . . . . . . . . . . . . . F-2
Consolidated Statement of Stockholders' Equity (Deficiency). . . F-3
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . F-4
Notes to Consolidated Financial Statements . . . . . . . . . . . F-5
Item 2. Management's Plan of Operation . . . . . . . . . . . . . . . . . 1
Item 3. Controls and Procedures. . . . . . . . . . . . . . . . . . . . . 3
PART 2 - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . 4
Item 2. Changes in Securities and Use of Proceeds. . . . . . . . . . . . 4
Item 3. Defaults upon Senior Securities. . . . . . . . . . . . . . . . . 4
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . 4
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . . . 4
Item 6. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
i
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30
(US DOLLARS)
============================================================================================
SEPTEMBER 30, JUNE 30,
2006 2006
- --------------------------------------------------------------------------------------------
(unaudited)
ASSETS
CURRENT
Cash $ 3,464,548 $ 1,496,818
Prepaid expenses 81,785 109,045
- --------------------------------------------------------------------------------------------
TOTAL ASSETS $ 3,546,333 $ 1,605,863
============================================================================================
LIABILITIES
CURRENT
Accounts payable and accruals $ 585,483 $ 687,603
- --------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 585,483 687,603
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STOCKHOLDERS' EQUITY
PREFERRED STOCK AND PAID-IN CAPITAL IN EXCESS OF $0.001
Par Value
20,000,000 shares authorized
308,538 (2006 - 308,538) issued and outstanding 308,538 308,538
COMMON STOCK AND PAID-IN CAPITAL IN EXCESS OF $0.001
Par Value
150,000,000 shares authorized
45,439,969 (2006 - 44,234,432) issued and outstanding 24,422,124 22,035,483
PROMISSORY NOTES RECEIVABLE (29,737) (32,500)
OTHER COMPREHENSIVE INCOME 46,267 46,267
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (21,786,342) (21,439,528)
- --------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 2,960,850 918,260
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,546,333 $ 1,605,863
============================================================================================
See notes to consolidated financial statements.
F-1
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(US DOLLARS)
=========================================================================================
PERIOD FROM
FEBRUARY 12,
1996
THREE MONTHS ENDED (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30,
2006 2005 2006
- -----------------------------------------------------------------------------------------
REVENUE $ 0 $ 0 $ 249,308
COST OF SALES 0 0 216,016
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0 0 33,292
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OTHER INCOME 38,890 0 699,291
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EXPENSES
Salaries and benefits 127,897 124,840 5,261,039
Consulting 104,226 184,100 3,860,835
Legal and accounting 67,429 78,663 3,577,488
General and administrative 38,213 28,489 936,104
Travel and entertainment 19,541 20,176 1,101,795
Telephone 10,967 6,149 377,222
Rent 9,459 9,186 366,814
Bank charges and interest, net 3,882 177 181,270
Advertising 224 0 320,490
Research and development 0 0 847,459
Settlement of lawsuit 0 0 45,250
Remuneration pursuant to proprietary,
non-competition agreement 0 0 711,000
Financing fees 0 0 129,043
Write-off of investments 0 0 1,250,000
Interest on beneficial conversion feature 0 0 566,456
Write-down of license and operating assets 0 0 1,855,619
Bad debts 0 0 52,613
Amortization 0 5,758 324,386
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381,838 457,538 21,764,883
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NET LOSS FOR PERIOD $ 342,948 $ 457,538 $ 21,032,300
=========================================================================================
LOSS PER COMMON SHARE $ (0.01) $ (0.01)
=========================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 44,431,188 42,439,149
=========================================================================================
See notes to consolidated financial statements.
F-2
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(UNAUDITED)
(US DOLLARS)
========================================================================================================================
COMMON PREFERRED
SHARES STOCK AND SHARES OF STOCK AND
OF COMMON PAID-IN CAPITAL PREFERRED PAID IN-CAPITAL PROMISSORY
STOCK IN EXCESS STOCK IN EXCESS NOTES SHARE
ISSUED OF PAR ISSUED OF PAR RECEIVABLE SUBSCRIPTIONS
- ------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2005 42,439,149 $ 20,522,085 308,538 $ 308,538 $ (66,500) $ 0
SHARES ISSUED FOR
Exercise of options 200,000 134,000 0 0 0 0
Cashless exercise of warrants 35,115 0 0 0 0 0
For services 269,000 191,510 0 0 0 0
Exercise of warrants 1,291,168 1,080,669 0 0 0 0
Repayment of promissory note 0 0 0 0 34,000 0
Dividends on preferred shares 0 0 0 0 0 0
Stock option compensation 0 107,219 0 0 0 0
Net loss for year 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 2006 44,234,432 22,035,483 308,538 308,538 (32,500) 0
SHARES ISSUED FOR
Exercise of options 25,000 25,000 0 0 0 0
Private placement 1,180,537 2,361,641 0 0 0 0
Repayment of promissory note 0 0 0 0 2,763 0
Dividends on preferred shares 0 0 0 0 0 0
Net loss for period 0 0 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 2006 45,439,969 $ 24,422,124 308,538 $ 308,538 $ (29,737) $ 0
========================================================================================================================
=================================================================================
DEFICIT
ACCUMULATED
OTHER DURING THE TOTAL
COMPREHENSIVE DEVELOPMENT STOCKHOLDERS'
INCOME STAGE EQUITY (DEFICIT)
=================================================================================
BALANCE, JUNE 30, 2005 $ 46,267 $(19,319,912) $ 1,490,478
SHARES ISSUED FOR
Exercise of options 0 0 134,000
Cashless exercise of warrants 0 0 0
For services 0 0 191,510
Exercise of warrants 0 0 1,080,669
Repayment of promissory note 0 0 34,000
Dividends on preferred shares 0 (15,427) (15,427)
Stock option compensation 0 0 107,219
Net loss for year 0 (2,104,189) (2,104,189)
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BALANCE, JUNE 30, 2006 46,267 (21,439,528) 918,260
SHARES ISSUED FOR
Exercise of options 0 0 25,000
Private placement 0 0 2,361,641
Repayment of promissory note 0 0 2,763
Dividends on preferred shares 0 (3,866) (3,866)
Net loss for period 0 (342,948) (342,948)
- ---------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 2006 $ 46,267 $(21,786,342) $ 2,960,850
=================================================================================
See notes to consolidated financial statements.
F-3
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(US DOLLARS)
===============================================================================================================
PERIOD FROM
FEBRUARY 12,
1996
THREE MONTHS ENDED (INCEPTION) TO
SEPTEMBER 30, SEPTEMBER 30,
2006 2005 2006
===============================================================================================================
OPERATING ACTIVITIES
Net loss $ (342,948) $ (457,538) $ (21,032,300)
Items not involving cash
Write-down of investment 0 0 1,250,000
Proprietary, non-competition agreement 0 0 711,000
Amortization 0 5,758 349,941
Other income 0 0 (658,305)
Consulting services and financing fees 40,628 67,500 1,364,621
Stock option compensation 0 0 1,240,702
Interest on beneficial conversion feature 0 0 566,456
Settlement of lawsuit 0 0 60,250
Write-down of license and operating assets 0 0 1,853,542
Bad debts 0 0 77,712
CHANGES IN NON-CASH WORKING CAPITAL
Due from affiliated company 0 0 (116,000)
Notes and account receivable 0 0 (109,213)
Inventory 0 0 (46,842)
Prepaid expenses (13,368) (13,472) (27,623)
Other 0 0 (2,609)
Accounts payable and accruals (105,986) 71,330 885,471
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CASH USED IN OPERATING ACTIVITIES (421,674) (326,422) (13,633,197)
- ---------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of property, equipment and intangible assets 0 0 (200,935)
Assets acquired and liabilities assumed on purchase of subsidiary 0 0 (129,474)
Investment purchase 0 0 (2,000,000)
License agreement 0 0 (124,835)
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CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 0 0 (2,455,244)
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FINANCING ACTIVITIES
Share redemption 0 0 (50,000)
Repayments (to) from stockholders 2,763 0 (102,283)
Issuance of common stock 2,386,641 0 17,981,475
Advances from stockholders, net of repayments 0 0 1,078,284
Share issue cost 0 0 (227,420)
Subscriptions received 0 0 226,666
Proceeds from convertible debentures 0 0 600,000
- ---------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY FINANCING ACTIVITIES 2,389,404 0 19,506,722
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EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH 0 0 46,267
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INFLOW (OUTFLOW) OF CASH 1,967,730 (326,422) 3,464,548
CASH, BEGINNING OF PERIOD 1,496,818 1,791,442 0
- ---------------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD $3,464,548 $1,465,020 $ 3,464,548
===============================================================================================================
See notes to consolidated financial statements.
F-4
INTEGRAL TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 3006
(UNAUDITED)
(US DOLLARS)
================================================================================
1. BASIS OF PRESENTATION
These unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United
States for interim financial information. These financial statements are
condensed and do not include all disclosures required for annual financial
statements. The organization and business of the Company, accounting
policies followed by the Company and other information are contained in the
notes to the Company's audited consolidated financial statements filed as
part of the Company's June 30, 2006 Form 10-KSB.
In the opinion of the Company's management, these consolidated financial
statements reflect all adjustments necessary to present fairly the
Company's consolidated financial position at September 30, 2006 and June
30, 2006 and the consolidated results of operations and the consolidated
statements of cash flows for the three months ended September 30, 2006 and
2005. The results of operations for the three months ended September 30,
2006 are not necessarily indicative of the results to be expected for the
entire fiscal year.
2. STOCKHOLDERS' EQUITY
On September 15, 2006, the Company closed a private placement of 1,180,537
units consisting of common stock at $2 per share and warrants to purchase
590,269 shares of common stock within two years at an exercise price of
$2.50 per share, provided that in the event that the average closing bid
price of a share of the Company's common stock exceeds $4.50 for ten
consecutive trading days, the Company has the right to redeem the warrants
for $.01 per share of common stock purchasable hereunder, upon thirty days'
written notice (the holder shall have the right to exercise the warrant in
accordance with its terms prior to the expiration of the thirty-day
period). The purchase price attributable to the warrants was $.001 per
share of common stock underlying the warrants. Aggregate proceeds from the
sale of the common stock and the warrants was $2,361,641 ($2,361,074 for
the common stock and $590 for the warrants). At any time commencing sixty
days after the close of the offering, the investors can require that the
Company prepare and file a registration statement to register the shares of
common stock (including the shares underlying the warrants) for resale by
the investors. The Company also reserves the right to file such a
registration statement at any time after the closing date on its own
initiative.
F-5
ITEM 2. PLAN OF OPERATION.
Statements contained herein that are not historical facts are forward-looking
statements. Although we believe that the expectations reflected in such
forward-looking statements are reasonable, the forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ
from those projected. We caution investors that any forward-looking statements
made by us are not guarantees of future performance and that actual results may
differ materially from those in the forward-looking statements. Such risks and
uncertainties include, without limitation: well-established competitors who have
substantially greater financial resources and longer operating histories,
regulatory delays or denials, ability to compete as a start-up company in a
highly competitive market, and access to sources of capital.
The following discussion and analysis should be read in conjunction with our
financial statements and notes thereto included elsewhere in this Form 10-QSB.
Except for the historical information contained herein, the discussion in this
Form 10-QSB contains certain forward-looking statements that involve risks and
uncertainties, such as statements of our plans, objectives, expectations and
intentions. The cautionary statements made in this Form 10-QSB should be read as
being applicable to all related forward-looking statements wherever they appear
in this Form 10-QSB. Our actual results could differ materially from those
discussed here.
To date we have recorded nominal revenues from the sales of prototypes. We are
still considered a development stage company for accounting purposes. From
inception on February 12, 1996 through September 30, 2006, we have incurred an
accumulated deficit of approximately $21.8 million.
At September 30, 2006, all of our assets were current assets of $3,546,333,
consisting of cash of $3,464,548 and prepaid expenses of $81,785. All of our
property and equipment has been fully depreciated.
At September 30, 2006, all of our liabilities were current liabilities of
$585,483, consisting of accounts payable and accruals. Of this amount, payables
for legal fees (including associated filing fees) related to patent filings
accounting for approximately $495,000 of the total.
At September 30, 2006, total stockholder's equity was $2,960,850.
Our net loss for the quarter ended September 30, 2006 was $342,948, compared to
a net loss of $457,538 in the corresponding period of the prior fiscal year, a
decrease of $114,590. This substantial reduction in our net loss is primarily
due to two factors: an increase in other income ($38,890 compared to $0 in the
prior period) and a reduction in consulting fees ($104,226 compared to $184,100
in the prior period). The category of "other income" consists of interest
income and nominal license fees.
The primary expenses during the quarter were salaries and benefits ($127,897)
and consulting fees ($104,226). Consulting fees include a charge of
approximately $40,000 (a non-cash expense) for shares previously issued to a
consultant for services.
We are not in the manufacturing business and do not expect to make any capital
purchases of a manufacturing plant or significant equipment in the next twelve
months.
We anticipate spending approximately $250,000 over the next twelve months on
ongoing research and development (primarily salaries and consulting fees) of the
different applications and uses of our technologies.
During the next twelve months, we do not anticipate increasing our staff.
As of September 30, 2006, we had $3,464,548 in cash on hand. We received
approximately $1.1 million in cash upon the exercise of outstanding warrants by
warrant holders in June 2006. In September 2006, we completed a private
placement of common stock and common stock purchase warrants and raised an
1
additional $2,361,641. Accordingly, management believes that there is adequate
cash on hand to fund operations over the next twelve months.
Presently, we are focusing all of our resources on the researching, developing
and commercializing of our ElectriPlast(R) technologies. Our business strategy
focuses on leveraging our intellectual property rights and our strengths in
product design and material innovation. We are focusing our marketing efforts on
securing licensing agreements for applications of our ElectriPlast(R)
technologies with manufacturers of products which would benefit from the
incorporation of any of the ElectriPlast(R) applications.
ElectriPlast(R) is an innovative, electrically-conductive resin-based material.
The ElectriPlast(R) polymer is a compounded formulation of resin-based
materials, which are conductively loaded, or doped, with a
proprietary-controlled, balanced concentration of micron conductive materials,
then pelletized. The conductive loading or doping within this pellet is then
homogenized using conventional molding techniques and conventional molding
equipment. The end result is a product that can be molded into any of the
infinite shapes and sizes associated with plastics and rubbers, and is
non-corrosive, but which is as electrically conductive as if it were metal.
Various examples of applications for ElectriPlast(R) are shielding, lighting
circuitry, switch actuators, resistors, medical devices, thermal management and
cable connector bodies, to name just a few. We have been working to introduce
these new applications and the ElectriPlast(R) technology on a global scale.
Our intellectual property portfolio consists of over ten years of accumulated
research and design knowledge and trade secrets. We have sought U.S. patent
protection for many of our ideas related to our ElectriPlast(R) technologies.
Currently, we have filed 109 U.S. patent applications, 16 of which have been
issued, 3 of which have been allowed and are pending issuance, and 90 of which
have been filed and are pending approval. No assurances can be given that all
patent applications will be approved; however, to the extent that patents are
not granted, We will continue to attempt to commercialize these technologies
without the protection of patents. As patents are issued, we will have the
exclusive right to use in the U.S. the design(s) described in each issued patent
for the 18-year life of the patent.
SUMMARY OF RECENT BUSINESS DEVELOPMENTS
We have recently completed our first two commercial agreements.
Patent License Agreement with Heatron, Inc.
- -------------------------------------------
In March 2006, we entered into a Patent License Agreement with Heatron, Inc.
("Heatron"), pursuant to which we granted to Heatron the rights to use our
ElectriPlast(R) technology for specific applications in the heating and LED
lighting markets. Heatron, founded in 1977 and based in Leavenworth, Kansas, is
an industry leader in heating element and thermal management designs and
solutions.
We granted to Heatron a non-exclusive, non-sublicensable, non-assignable,
worldwide license; however, Heatron's rights are exclusive for the initial two
years. The agreement will terminate upon the expiration of the last patent
licensed under the agreement, or earlier under certain circumstances.
Heatron paid to us a nominal up-front license fee of $1.00. Any revenue to be
generated by us under the agreement will be from raw materials fees. We have
not yet derived revenues from this agreement.
Patent License Agreement with Jasper Rubber Products, Inc.
- ----------------------------------------------------------
In August 2006, we entered into a Patent License Agreement with Jasper Rubber
Products, Inc. ("Jasper"), pursuant to which we granted to Jasper the rights to
use our ElectriPlast(R) technology for specific applications within its customer
base. Jasper, founded in 1949, and based in Jasper, Indiana, is an industry
leader in innovative rubber and plastics development. Jasper manufactures a full
range of
2
molded, extruded, lathe-cut rubber and thermoplastic products for major
appliance, oil filter, and automotive industries.
We granted to Jasper a non-exclusive, non-sublicensable, non-assignable,
worldwide license. The agreement will terminate upon the expiration of the last
patent licensed under the agreement, or earlier under certain circumstances.
Jasper paid to us a nominal up-front license fee of $1.00. Any revenue to be
generated by us under the agreement will be from raw materials fees. We have
not yet derived revenues from this agreement.
ITEM 3. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure. In designing and evaluating the disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives, and management necessarily was
required to apply its judgment in assessing the costs and benefits of such
controls and procedures.
With the participation of management, our Chief Executive Officer and Chief
Financial Officer evaluated the effectiveness of the design and operation of our
disclosure controls and procedures at the conclusion of the period ended
September 30, 2006. Based upon this evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and procedures
were effective in ensuring that material information required to be disclosed is
included in the reports that we file with the Securities and Exchange
Commission.
There were no significant changes in our disclosure controls or in other factors
that could significantly affect those controls subsequent to the date of this
evaluation, including any corrective actions with regard to significant
deficiencies and weaknesses.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management has not yet completed, and is not yet required to have completed, its
assessment of the effectiveness of internal control over financial reporting as
required by Section 404 of the Sarbanes-Oxley Act of 2002, as amended.
3
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Information regarding the issuance and sale of securities without registration
during the quarter ended September 30, 2006, was previously included in a
Current Report on Form 8-K filed September 19, 2006.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None.
ITEM 5. OTHER INFORMATION.
GRANT OF OPTION
On November 6 2006, we provided a Grant of Option to Thomas Aisenbrey, our Chief
Technical Officer. Pursuant to the Grant of Option, Mr. Aisebrey was granted an
option to acquire 1,000,000 share of common stock at an exercise price of $2.25
per share, exercisable in whole or in part at any time until June 30, 2010. The
exercise price per share shall automatically be adjusted down to $.001 per share
in the event of a "triggering event," which is defined as the termination of
employment of Mr. Aisenbrey or a change in control of the company. A change in
control of the company shall be deemed to have occurred if there is any sale,
exchange or transfer of all or substantially all of the assets of the company,
or if there is any merger or share exchange involving the company, which has the
result of effecting a change in control of the business through a change in
management and/or officers and directors of the company.
The option and the underlying shares of common stock are subject to restrictions
on transfer, as required by applicable federal and state securities laws. The
Grant of Option was not under either of our existing equity compensation plans
(the 2001 Stock Plan and the 2003 Stock Plan).
A copy of the Grant of Option provided to Mr. Aisenbrey is attached as an
exhibit to this report and is incorporated by reference herein.
CES INNOVATIONS 2007 DESIGN AND ENGINEERING AWARD
On November 8, 2006, we issued a press release to announce that our
ElectriPlast(TM) technology has been selected as a recipient of a CES
Innovations 2007 Design and Engineering Award in the Enabling Technologies
product category. Presented by the Consumer Electronics Association (CEA) and
the International Consumer Electronics Show (CES), the Innovations Awards
recognize advancements in technology and engineering. This year, an independent
panel of judges evaluated more than 1,000 entries from over 160 companies. A
copy of the press release is attached as an exhibit hereto.
4
ITEM 6. EXHIBITS.
No. Description
--- -----------
3.03 Articles of Incorporation, as amended and currently in effect. (Incorporated by reference to
Exhibit 3.03 of Integral's quarterly report on Form 10-QSB for the period ended March 31, 2006.)
3.04 Bylaws, as amended and restated on December 31, 1997. (Incorporated by reference to Exhibit
3.04 of Integral's quarterly report on Form 10-QSB for the period ended March 31, 2006.)
10.12 Integral Technologies, Inc. 2001 Stock Plan dated January 2, 2001, as amended December 17,
2001. (Incorporated by reference to Exhibit 10.12 of Integral's registration statement on Form S-8
(file no. 333-76058).)
10.15 Integral Technologies, Inc. 2003 Stock Plan dated April 4, 2003 (Incorporated by reference to
Exhibit 10.15 of Integral's registration statement on Form S-8 (file no. 333-104522).)
10.18 Grant of Option dated June 17, 2005 between Integral and Thomas Aisenbrey. (Incorporated by
reference to Exhibit 10.18 of Integral's Current Report Form 8-K dated June 17, 2005 (filed
June 23, 2005).)
10.19 Agreement between the Company and The QuanStar Group, LLC dated June 20, 2005.
(Incorporated by reference to Exhibit 10.18 of Integral's Current Report Form 8-K dated June 17,
2005 (filed June 23, 2005).)
10.20 Patent License Agreement between the Company and Heatron, Inc. dated March 17, 2006.
(Incorporated by reference to Exhibit 10.20 of Integral's Current Report Form 8-K dated
March 17,2006 (filed April 11, 2006).)
10.21 Patent License Agreement between the Company and Jasper Rubber Products, Inc. dated
August 25, 2006. (Incorporated by reference to Exhibit 10.21 of Integral's Current Report
Form 8-K dated August 25, 2006 (filed September 19, 2006).)
10.22 Grant of Option dated November 6, 2006 between Integral and Thomas Aisenbrey. (Filed
herewith.)
31.1 Section 302 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
31.2 Section 302 Certification by the Corporation's Chief Financial Officer. (Filed herewith).
32.1 Section 906 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
32.2 Section 906 Certification by the Corporation's Chief Financial Officer. (Filed herewith).
99.05 Press release dated November 8, 2006. (Filed herewith.)
5
SIGNATURES
In accordance with the requirements of the Exchange Act, the Company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INTEGRAL TECHNOLOGIES, INC.
By: /s/ William S. Robinson
------------------------------------
William S. Robinson,
Chief Executive Officer
By: /s/ William A. Ince
------------------------------------
William A. Ince,
Chief Financial Officer and
Principal Accounting Officer
Date: November 14, 2006
6
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
3.03 Articles of Incorporation, as amended and currently in effect. (Incorporated by reference to
Exhibit 3.03 of Integral's quarterly report on Form 10-QSB for the period ended March 31, 2006.)
3.04 Bylaws, as amended and restated on December 31, 1997. (Incorporated by reference to Exhibit
3.04 of Integral's quarterly report on Form 10-QSB for the period ended March 31, 2006.)
10.12 Integral Technologies, Inc. 2001 Stock Plan dated January 2, 2001, as amended December 17,
2001. (Incorporated by reference to Exhibit 10.12 of Integral's registration statement on Form S-8
(file no. 333-76058).)
10.15 Integral Technologies, Inc. 2003 Stock Plan dated April 4, 2003 (Incorporated by reference to
Exhibit 10.15 of Integral's registration statement on Form S-8 (file no. 333-104522).)
10.18 Grant of Option dated June 17, 2005 between Integral and Thomas Aisenbrey. (Incorporated by
reference to Exhibit 10.18 of Integral's Current Report Form 8-K dated June 17, 2005 (filed
June 23, 2005).)
10.19 Agreement between the Company and The QuanStar Group, LLC dated June 20, 2005.
(Incorporated by reference to Exhibit 10.18 of Integral's Current Report Form 8-K dated June 17,
2005 (filed June 23, 2005).)
10.20 Patent License Agreement between the Company and Heatron, Inc. dated March 17, 2006.
(Incorporated by reference to Exhibit 10.20 of Integral's Current Report Form 8-K dated
March 17, 2006 (filed April 11, 2006).)
10.21 Patent License Agreement between the Company and Jasper Rubber Products, Inc. dated
August 25, 2006. (Incorporated by reference to Exhibit 10.21 of Integral's Current Report
Form 8-K dated August 25, 2006 (filed September 19, 2006).)
10.22 Grant of Option dated November 6, 2006 between Integral and Thomas Aisenbrey. (Filed
herewith.)
31.1 Section 302 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
31.2 Section 302 Certification by the Corporation's Chief Financial Officer. (Filed herewith).
32.1 Section 906 Certification by the Corporation's Chief Executive Officer. (Filed herewith).
32.2 Section 906 Certification by the Corporation's Chief Financial Officer. (Filed herewith).
99.05 Press release dated November 8, 2006. (Filed herewith.)